The global aviation sector has urged the European Union to review its approach to sustainability and competition in an effort to encourage greater resilience and confident.

The International Air Transport Association (IATA) has issued a call for a review of the European Union’s Emissions Trading System (EU ETS) to enhance European air connectivity and economic resilience by improving the competitiveness of Europe’s air transport industry.

IATA said any review should:

• Ensure full implementation of CORSIA for all international flights, including flights within the European Economic Area (EEA) routes. To prevent market fragmentations, the EU should avoid regional derogations, additional eligibility hurdles, and overlapping measures that conflict with this global framework.
• Enable a Sustainable Aviation Fuel (SAF) book-and-claim system for the claiming of environmental attributes under the EU ETS. Allowing purchase-based SAF claiming will enhance investment certainty and affordability which are needed to maintain a level playing field for all operators.
• Reinvest revenue into decarbonisation. Direct a greater portion of aviation’s EU ETS contributions back into the industry’s transition. Priority should be given to scaling SAF production and supporting the development of emerging zero-emission technologies.
• Balance climate policy for resilience which should involve pursuing ambitious climate targets while safeguarding the air transport industry’s global competitiveness. All measures must be grounded in scientific facts and harmonized with international standards to avoid disproportionate administrative burdens and excessive costs.

IATA’s call comes amid growing scepticism among EU leaders regarding the effectiveness of the EU ETS and its negative impact on European competitiveness.

This position aligns with the Draghi Report, which identifies high costs, regulatory complexity, and underinvestment as critical barriers to the bloc’s economic resilience. In an era of geopolitical volatility and supply chain disruptions, robust air connectivity remains a vital asset for Europe’s global standing.

Willie Walsh, IATA’s Director General: “European aviation policy must bolster competitiveness as it advances decarbonisation. Reviewing the EU ETS offers a critical opportunity to refocus efforts on cost-effective emission reductions. The priority must be the full implementation of CORSIA, the reinvestment of EU ETS revenues into SAF and other credible decarbonisation solutions, and the elimination of overlapping measures that add cost and complexity without environmental gain. By doing so, we will protect European air connectivity – a vital strategic asset foundational to EU integration, trade, and commerce. Amid global economic strain and geopolitical volatility, the EU ETS review must deliver a harmonised climate policy framework that balances the sector’s competitiveness with its climate ambitions,.”

The organisation added: “A sudden spike in compliance costs, coupled with global geopolitical instability, threatens to weaken European connectivity and limit consumer choice.

“New EU ETS rules effective from 2026 raise the stakes for the sector, making a harmonized climate policy that balances ambition with affordability a strategic necessity.

“Aviation plays a critical role in the EU’s economy, and the EU ETS can play an important role in aviation’s decarbonization. To ensure both, EU aviation policy must align with global frameworks, support investment in measurable emissions reductions, and avoid unnecessary duplication and disproportionate costs for all airlines operating in the EU and for their passengers.”